Homework Answers
Answer: D) Federal Funds:
Federal funds refer to the excess reserves held by banks & financial institutions, in excess of the required reserve requirements as stipulated or mandated by the central bank. Banks generally borrow or lend their excess funds to each other on an overnight basis, as some banks find themselves with too much reserves and others
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Excess reserves of commercial banks which are deposited with Federal Reserve Banks are referred to as:...
Question 33 2 Lending temporary excess reserves held at the Federal Reserve Banks is a way...
Question 33 2 Lending temporary excess reserves held at the Federal Reserve Banks is a way that banks can partly reconcile the conflicting goals of: Stocks and flows Inputs and outputs Profit and liquidity Expansion and contraction Question 34 2 pt The multiple by which the commercial banking system can expand the supply of money is equal to: Its excess reserves The reciprocal of the discount rate The reciprocal of the reserve ratio The ratio of fixed to liquid assets...
Which of the following would increase the money supply? Multiple Choice Commercial banks use excess reserves...
Which of the following would increase the money supply? Multiple Choice Commercial banks use excess reserves to buy government bonds from the Federal Reserve. Commercial banks sell government bonds to the Federal Reserve. Commercial banks loan out excess reserves O A check clears from Bank A to Bank B. < Prey 5 of 35
Discount rate ( interest rate that banks pay to borrow reserves from the Federal Reserve) is...
Discount rate ( interest rate that banks pay to borrow reserves from the Federal Reserve) is determined by -Federal Reserve Board of Governors -Federal Reserve banks -commercial banks
The Federal Reserve pays interest on the reserve deposits banks hold with the Fed. Explain if...
The Federal Reserve pays interest on the reserve deposits banks hold with the Fed. Explain if and how the banks could earn any profit without cost in the following situations by taking advantage of differences in the Discount rate, Federal funds rate and interest paid on reserves. Banks would just borrow/lend each other or from the Fed or hold reserves in their account. -The discount rate is 2.5%, the effective federal funds rate is 2% and the interest paid on...
QUESTION 1 Commercial bank reserves held at a Federal Reserve Bank are a liability of the...
QUESTION 1 Commercial bank reserves held at a Federal Reserve Bank are a liability of the commercial bank and an asset of the Federal Reserve. True False QUESTION 2 During normal economic times, the Federal Reserve has primarily influenced overall financial conditions by adjusting the federal funds rate. The Fed Funds rate is the rate the U.S. Government charges banks for short term credit. True False QUESTION 3 Everything else held constant, a decrease in holdings of excess reserves will...
Why does the Federal Reserve require that banks have reserves? What are excess reserves? How do...
Why does the Federal Reserve require that banks have reserves? What are excess reserves? How do you calculate the excess reserves held? 6.
8 Which of the following can people not get at their commercial banks? Multiple Choice eBook...
8 Which of the following can people not get at their commercial banks? Multiple Choice eBook Print money market deposit accounts time deposits certificates of deposit money market mutual fund:s Which part of the Federal Reserve System holds reserves of the member banks? Multiple Choice eBook Print The Federal Open Market Committee The Board of Governors The Federal Advisory Committee The 12 Federal Reserve Banks
Suppose the Federal Reserve sets the reserve requirement at 20 percent, banks hold no excess reserves,...
Suppose the Federal Reserve sets the reserve requirement at 20 percent, banks hold no excess reserves, and no additional currency is held.
ommercial Bank has $5,000 in excess reserves, $90,000 in checkable deposit and the reserve ratio is...
ommercial Bank has $5,000 in excess reserves, $90,000 in checkable deposit and the reserve ratio is 30 percent. The bank must have: A. $35,000 in reserves. B. $32,000 in reserves. C. $10,000 in reserves. D. 15,000 in reserves 23. Suppose a commercial bank has checkable deposits of $100,000 and the legal reserve ratio is A. are $17,000. 10 percent. If this bank has $ 17,000 in reserves, then its excess reserves: B. are $10,000. C. are $7,000. D. are $1,700...
If banks are currently holding zero excess reserves and the Fed raises the required-reserve ratio, which...
If banks are currently holding zero excess reserves and the Fed raises the required-reserve ratio, which of the following will happen? Select one: a. Banks will have a reserve deficiency and will look to sell assets or securities to raise cash (reserves). b. Banks will have positive excess reserves. c. Banks will begin to extend more loans. d. Banks will begin to extend more credit. e. b and d
Question 33 2 Lending temporary excess reserves held at the Federal Reserve Banks is a way that banks can partly reconcile the conflicting goals of: Stocks and flows Inputs and outputs Profit and liquidity Expansion and contraction Question 34 2 pt The multiple by which the commercial banking system can expand the supply of money is equal to: Its excess reserves The reciprocal of the discount rate The reciprocal of the reserve ratio The ratio of fixed to liquid assets...
Which of the following would increase the money supply? Multiple Choice Commercial banks use excess reserves to buy government bonds from the Federal Reserve. Commercial banks sell government bonds to the Federal Reserve. Commercial banks loan out excess reserves O A check clears from Bank A to Bank B. < Prey 5 of 35
Why does the Federal Reserve require that banks have reserves? What are excess reserves? How do you calculate the excess reserves held? 6.
8 Which of the following can people not get at their commercial banks? Multiple Choice eBook Print money market deposit accounts time deposits certificates of deposit money market mutual fund:s Which part of the Federal Reserve System holds reserves of the member banks? Multiple Choice eBook Print The Federal Open Market Committee The Board of Governors The Federal Advisory Committee The 12 Federal Reserve Banks
Suppose the Federal Reserve sets the reserve requirement at 20 percent, banks hold no excess reserves, and no additional currency is held.
ommercial Bank has $5,000 in excess reserves, $90,000 in checkable deposit and the reserve ratio is 30 percent. The bank must have: A. $35,000 in reserves. B. $32,000 in reserves. C. $10,000 in reserves. D. 15,000 in reserves 23. Suppose a commercial bank has checkable deposits of $100,000 and the legal reserve ratio is A. are $17,000. 10 percent. If this bank has $ 17,000 in reserves, then its excess reserves: B. are $10,000. C. are $7,000. D. are $1,700...
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